This invention relates to business registers, and more particularly to systems for automatic computation of sales tax.
Collection of sales tax is a responsibility of most business in the United States. Many states provide for rigid auditing of sales tax records. Thus, it is necessary for businesses to collect exact amounts of sales tax in accordance with various states sales tax tables. Sales tax is commonly looked up on a chart by a cashier or salesperson in most cases. Certain amounts on state sales tax charts are listed next to an exact tax, higher amounts require calculation to be performed in addition to looking up a basic amount on the sales tax table. Even where a business is efficiently run with modern methods and automated equipment, it may be necessary to perform the time consuming and errorprone task of manual calculation and addition of sales tax. Errors in sales tax calculation cause both violation of the law, as well as possible loss of revenue to the retail establishment, since the retail establishment is held liable for sales taxes.
While prior systems for automatic calculation of sales tax have been provided, such as those included in computerized cash registers, such systems are quite complicated and may even prove to be errorprone. The typical automatic sales tax computation system which includes a memory into which an entire sales tax table is written, calculates a sales tax read from the memory for certain amounts and calculates sales tax as a straight percentage for higher amounts. An example in which this form of calculation may lead to error is seen in reference to the New Hampshire state sales tax table below.
______________________________________ .01 - .15 No tax .16 - .25 .01 .26 - .45 .02 .46 - .65 .03 .66 - .85 .04 .86 - 1.05 .05 1.06 - 1.25 .06 ______________________________________
For taxable charges of over $1.25, the rate is one cent for each 20 cent increment, (5%).
This tax table requires collection of a 5 percent tax rate plus 1 cent for each 20 cents over $1.25. As an example, the tax on $1.46 is examined. A straight 5 percent of $1.46 is 7.3 cents or 7 cents tax. However, according to the chart, the tax on $1.25 is 6 cents plus 2 more cents since $1.46 is in the second 20-cent increment above $1.25. This results in a tax of 8 cents. Thus, a typical automatic sales tax calculator could produce an erroneous result.
Another method of computing taxes that would lead to errors with tax computation in certain states, is one where the computer operates on this basis - that there is a first group of points having successive cutoff values, for example $0.10, $0.35 and $0.78, and that all subsequent groups of cutoff values are the same as the first group with addition of whole dollar values. For example $1.10, $1.35, and $1.78 and so on. If the tax table for a particular state does not have a repeating pattern of this nature the system can not accurately calculate tax.
Automatic sales tax computers which must store an entire sales tax table in order to produce a direct result are unduly complicated and expensive. Sales tax calculators which are simplified to read out exact amounts below a certain cutoff level and provide a straight percentage thereafter may be erroneous.